Do Research Joint Ventures Serve a Collusive Function?

Michelle Sovinsky and Eric Helland

No 270429, Economic Research Papers from University of Warwick - Department of Economics

Abstract: Every year thousands of Örms are engaged in research joint ventures (RJV), where all knowledge gained through R&D is shared among members. Most of the empirical literature assumes members are non-cooperative in the product market. But many RJV members are rivals leaving open the possibility that Örms may form RJVs to facilitate collusion. We examine this by exploiting variation in RJV formation generated by a policy change that a§ects the collusive beneÖts but not the research synergies associated with a RJV. We use data on RJVs formed between 1986 and 2001 together with Örm-level information from Compustat to estimate a RJV participation equation. After correcting for the endogeneity of R&D and controlling for RJV characteristics and Örm attributes, we Önd the decision to join is impacted by the policy change. We also Önd the magnitude is signiÖcant: the policy change resulted in an average drop in the probability of joining a RJV of 34% among telecommunications Örms, 33% among computer and semiconductor manufacturers, and 27% among petroleum reÖning Örms. Our results are consistent with research joint ventures serving a collusive function.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 59
Date: 2012-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://ageconsearch.umn.edu/record/270429/files/twerp_1030_sovinsky.pdf (application/pdf)
https://ageconsearch.umn.edu/record/270429/files/t ... y.pdf?subformat=pdfa (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:270429

DOI: 10.22004/ag.econ.270429

Access Statistics for this paper

More papers in Economic Research Papers from University of Warwick - Department of Economics
Bibliographic data for series maintained by AgEcon Search ().